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Facing a massive increase in electric car imports from China, many fear that Europe will resorts to tariffs to protect domestic producers. You have been
Facing a massive increase in electric car imports from China, many fear that Europe will resorts to tariffs to protect domestic producers. You have been provided with information on the price of Electric Cars in Europe after the imposition of a tariff by the European Union in some hypothetical future year: Under Free Trade you have the following information: World and US Price: $20,000 per Unit Domestic Consumption 5.5 Million Units Domestic Production: 2.5 Million Units Under a Tariff you have the following information: New US Price: $24,000 per Unit Domestic Consumption: 4.3 Million Units Domestic Production: 3.0 Million Units Under the Tariff : (a) How much does the government gain in tariff revenue? (b) How do domestic producers gain? (c) How much do consumer lose? (d) What is net national loss
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